Senate Proposal Continues Reducing Solar and Wind Incentives

The U.S. Senate supports nuclear and hydropower energy while planning to phase out incentives for solar and wind energy.

A new proposal from a U.S. Senate panel outlines major changes to clean energy policy, including plans to phase out tax credits for solar and wind while extending support for other energy sources that are favored by the current administration.

According to a draft bill released on Monday, a U.S. Senate panel suggested that the incentive for hydropower, nuclear, and geothermal energy will be extended to 2036, while the solar and wind energy tax credits would be completely phased out by 2028. A bill that was passed in the House last month was modified in a number of ways by the draft bill, which was a part of a larger Republican budget plan. The Senate plans to start cutting the solar and wind energy subsidies established under the 2022 Inflation Reduction Act in 2026, according to language released by the committee chair, Republican Senator Mike Crapo. These incentives, lowered to 60% of their original amount that year, would be eliminated entirely by 2028. As of right now, those tax credits are not scheduled to phase out until 2032. In contrast to the House bill, the Senate would give hydropower, nuclear, and geothermal projects 100% of the credit until 2033. After that, those benefits would be gradually reduced, reaching zero by 2036.

According to the summary of the bill released by Crapo, it will remove hundreds of billions of dollars in clean energy subsidies that are considered unneeded. Rather than relying on intermittent renewable energy sources, the proposal favors consistent energy sources. After this announcement, stocks of US solar companies fell sharply in extended trade on Monday.